Unemployment: not enough jobs ... or the wrong kinds of jobs?
Clayton Morgareidge
We hear daily on the news that the economy is coming back. But by “the economy,” these reports mean return on investments and consumer purchases, parts of the economy that can be lifted by a little more confidence among the fully employed and the wealthy. But there is another, and much larger, constituency of the economy – the working class –– in which the real level of unemployment is not just the 9-10% given in official reports, but, is over 16% of the work force when you add in discouraged workers and those working part time but looking for full-time work. According to a recent article in the Atlantic Monthly,
The economy now sits in a hole more than 10 million jobs deep—that’s the number required to get back to 5 percent unemployment, the rate we had before the recession started… [But] even if the economy were to immediately begin producing 600,000 jobs a month—more than double the pace of the mid-to-late 1990s, when job growth was strong—it would take roughly two years to dig ourselves out of the hole we’re in. …. And given the particulars of this recession, matching idle workers with new jobs—even once economic growth picks up—seems likely to be a particularly slow and challenging process.
Given the magnitude of the problem and the impact long-term unemployment has on the lives of workers and our communities, this would seem like the time to rethink the whole problem of employment and unemployment.
One new idea appeared lately in the Onion: The government could “subsidize the cryogenic freezing of recent college graduates until the job market recovers.” The Onion quotes a Republican Senator saying
Were we to freeze these graduates at the height of vigor and ambition, …, there’s a chance we could revive them during a more prosperous time. When the economy finally bounces back—10, 20, even 30 years from now—we’ll have an entire generation thawed out and ready to contribute.
One drawback noted by the Onion is that graduates would come back to find that their student loans had not been frozen but had continued to accumulate interest. Oh Well.
Here’s a more serious idea, one within our technological reach: Work Sharing. Writing in the Los Angeles Times last week, Dean Baker and Kevin Hassett point out that (quoting),
Currently, firms mostly respond to weak demand by laying off workers. Under a work-sharing program, firms are encouraged by government policy to spread a small amount of the pain across many workers.
In Germany, for example, which has used work-sharing aggressively in this downturn, a typical company might reduce the hours of 50 workers by 20% rather than laying off 10 workers. The government would then provide a tax credit to make up for most of the lost pay, with the employer kicking in some as well. In a typical arrangement, a worker might see his weekly hours go down by 20%, and his salary go down by about 4%.
This policy has kept the unemployment rate in Germany from rising even though the country has seen a sharper decline in GDP than the United States. …
Work-sharing should be familiar to Californians [and to a lesser extent to state workers in Oregon] because it's a variation of the furlough policy that state and local governments have used to avoid further layoffs. The big difference is that the furlough policy means workers take pay cuts that are proportional to the length of their furlough -- 20% fewer hours, 20% less pay.
By contrast, with a work-sharing arrangement, workers would keep their jobs while effectively dividing up the unemployment benefits that they could receive if they were laid off. For example, if a furlough requires them to take every fourth week off, instead of a 25% cut in pay, their pay would fall only 5% to 10%. The additional money could come from either the state unemployment insurance program or a new federal tax credit.
The cost to the government of going this route would be roughly the same as with the current unemployment insurance program. The big difference is that instead of unemployment benefits that effectively pay people for not working, we would be paying people for working shorter hours.
Of course this would be a good thing to do. But it leaves untouched the real root of the problem: that the amount of work to be done, and therefore the number of jobs available, is determined by the profits businesses can make by employing people. When investors cannot make a return on the money they invest, they do not invest, and that means jobs are lost and people suffer.
But why should we leave it up to investors – wealthy individuals and giant financial institutions – to make these decisions? Why should our livelihoods depend on the special interests of these money bags in getting bigger and bigger?
Or consider this question: What if the problem we’re faced with is not that there are not enough jobs, but that the jobs take up too much of our time? What if we made the jobs smaller, so there would be more of them, and more people could have them? After all, what law of nature says that a job has to be 40 hours a week or more?
Suppose we were all deciding together how much work, and what kinds of work, needs to be done? Why not decide what the necessary work is, and then divide it among us?
So what if it turned out there was not enough demand to require everyone to work 40 hours a week? Let’s say half of us working 40 hours a week could meet all our needs – which would certainly be possible in this age of automation and robotics? Would that mean half of us would be unemployed and so unable to live? Of course not. Each of us would work 20 hours a week, leaving us a lot of free time to do and create the things that make our lives much more than just staying alive. Use your imagination!
This idea of democratic, cooperative work sharing has been proposed in the past simply because modern technology makes it possible. The current crisis makes it necessary – necessary, that is, from the stand point of those of us who live from our labor rather than from our investments.
Naomi Klein has written about disaster capitalism – how capitalism uses catastrophes and crises to increase its strangle-hold on our lives. Isn’t it time to recognize that capitalism itself is catastrophic, and to let this crisis of unemployment be the beginning of a transition to a world where our labor belongs to us and not to the masters of wealth that works only for itself.
Here the sentiments of the old communist anthem “L’Internationale” seem called for. Let’s hear the sendup version by Tony Babino that accompanies the closing credits of Michael Moore’s movie Capitalism: A Love Story. It has the advantage of making the words very clear. (Audio, including the music)
I’m Clayton Morgareidge for the Old Mole Variety Hour
April 12, 2010